by Matthew Watkins and Annie Daniel, Texas Tribune
*Editor’s note: This story is the first of an occasional series about how Texas and Texans pay for college.
Patti Shannon’s youngest kid was in kindergarten when she and her husband started setting aside $200 per month for college.
They juggled their savings goals along with mortgage payments and high medical bills stemming from Patti’s seizure disorder. But with their two kids still watching cartoons when they started saving, the Shannons figured they’d be able to pile up enough money over the next 12 years.
That didn’t happen. Shannon, a paralegal, and her husband, a teacher, cobbled together more than $40,000, but it was gone within their son Geoff’s first year at Texas Tech University. Now Geoff, an applied physics major, is on pace for a fifth year in Lubbock. Their youngest, Cassie, is a freshman studying chemistry at the University of Texas at Austin. All told, the Shannons expect to spend more than $200,000 putting their two kids through college. The couple has taken out a home equity loan to stay afloat.
Across Texas, all kinds of families — from upper-middle class to poor — are struggling with the seemingly insurmountable challenge of paying for their children’s college. In the past 15 years, the average tuition and fees for a semester at a Texas public university has more than doubled from well under $2,000 to well over $4,000.
But while students are suffering financially, the state’s universities are feeling money pressure too — at least compared to their peers. From 2010 to 2015, Texas ranked last in the nation in total per-student revenue growth at its colleges and universities, according to a study by the State Higher Education Executive Officers Association.
That’s thanks in part to the shrinking number of dollars per student that Texas is sending its universities. In recent years, enrollment has exploded. Lawmakers in anti-tax Texas have been unwilling or unable to continue funding students’ educations at the same rate as a generation ago. And the Legislature has allowed universities to increase tuition to make up the difference.
Now a family like the Shannons can save for a dozen years and still not have a fifth of the money it needs to pay for college.
This year, state lawmakers from both parties are going to try to fix that. Some want to wrestle the power to set tuition back from the schools. Others want to lower or freeze tuition rates. But state appropriations for universities could shrink even more. And enrollment continues to rise.
With the strain that the state and its students are feeling, it’s difficult to say how the state can achieve its goal of elevating its public universities to among the top in the nation.
“We have a huge challenge,” said Raymund Paredes, commissioner of the Texas Higher Education Coordinating Board. “If we are going to get from here to there, we are going to have to work very differently.”
Deregulation
The belief that something needs to be done about how Texas pays for college is practically universal. But who is to blame for the current problems and how things should be fixed depend purely on whom you ask.
University leaders often point to the state government. That was the case in Austin this past April, when the University of Texas hosted a summit on university funding. Organizers warned that the decline in state funding for higher education was threatening the future of universities nationwide. In a meeting with reporters before the event, UT-Austin President Greg Fenves said the situation was nearing a “critical stage.”
Two weeks later, Republican Lt. Gov. Dan Patrick held his own meeting with reporters, where he scolded universities for raising tuition. He talked about how schools had been given the freedom to set their own costs — and then abused that freedom to the detriment of students.
“We are pricing the average family out of a college education in the state of Texas,” he said.
The schools got that freedom in 2003, when the Texas Legislature enacted what is known as tuition deregulation. That year, a struggling economy had stuck state lawmakers with a $10 billion budget shortfall. The new Republican Legislature and Gov. Rick Perry were determined to make up for that without raising taxes.
Universities, it seemed, would need to substantially raise tuition to avoid painful layoffs and reductions in course offerings. But state law put the job of setting tuition rates in the hands of the Legislature. New House Speaker Tom Craddickand University of Texas System Board of Regents Chairman Charles Miller teamed up to change that.
Craddick goaded other House members into giving up the power to set tuition. The Senate resisted, but Craddick held firm and forced the issue during budget negotiations. In the end, a compromise was reached. At the urging of then-Lt. Gov. David Dewhurst, hundreds of millions of dollars were restored to state universities. And Craddick got his deregulation.
“I was happy,” Miller said at the time. “It was all the taste, with less calories.”
Tuition jumps
Prices went up almost immediately. Texas A&M University raised its tuition 17 percent for 2004. The University of North Texas approved a 20 percent increase. Texas Tech University raised costs 19 percent. Within the decade, the average Texas tuition and fees bill had doubled. Through it all, deregulation’s critics howled that the Legislature had made a terrible mistake.
State leaders had pushed for the growth; they said it was necessary to meet Texas’ workforce needs. But they had a hard time budgeting for it. In good times, lawmakers poured new money into colleges and universities, but those infusions sometimes barely kept up with climbing enrollment. Then, when tough times hit — like in the post-9/11 recession or after the housing crash — cuts were made that were nearly impossible to restore without raising taxes.
By 2015, the state was allocating $6 billion more in its budget for higher education spending than it did in 2000-01. But per-student funding for four-year universities still shrank. When adjusting for inflation, it dipped from around $7,500 per student at the turn of the century to around $5,500 now.
All the while, state leaders were urging universities to climb the national rankings and improve their research programs. Tuition deregulation helped the schools work toward those goals. Even with funding decreases, Texas topped the nation in percent revenue growth from 2005 to 2010, according to the State Higher Education Executive Officers Association.
But that growth came at a major cost — the burden of supporting higher education shifted. For decades, Texas and its taxpayers had been the top funders of public universities. But as tuition went up and state appropriations went down, the students took over that distinction.
More cuts imminent
The Shannon family wasn’t ready for that shift.
“I tend to wonder if, even 15 years ago, saving $200 a month would have been enough,” Patti Shannon said.
She loathes debt and has made it a goal to get her children through college without student loans. In addition to taking out a second mortgage, she and her husband stopped paying into their retirement, put off vacations and don’t go out to eat.
Their son works in the tool rental section of Home Depot and lives in a house in Lubbock that has rats. Their daughter has applied for a resident adviser position at her UT-Austin dorm. They still struggle. Covering the tuition bill isn’t their only challenge. They also have to worry about textbooks, rent and groceries. With each new expense, the goal of getting their kids through college debt-free seems to be slipping out of reach.
Some higher education leaders say that’s not the worst thing in the world. The average student debt of a four-year public university graduate in Texas is about $30,000. That’s less than a mid-priced new car. And while new trucks lose their value immediately, a college degree is valuable for a lifetime.
But universities’ critics say something needs to be done. And they scoff at the idea that the rising costs are solely the state’s fault. When taking into account inflation, tuition has increased about twice as much as unrestricted state appropriations have dropped since deregulation. Ballooning administrative costs and country club-like amenities for students also deserve a lot of the blame, those critics say.
The schools’ defenders argue that technology needs and unfunded state and federal mandates have played a big role in driving up costs. When legislators were in charge of setting tuition, they were sensitive to those pressures. Tuition went up faster in the 10 years before deregulation than it did in the 10 years after, many university leaders have noted.
The political climate around the Capitol has changed dramatically since the 1990s, though. This year, many lawmakers are pushing to do something to keep costs down. The lieutenant governor has thrown his support behind a four-year freeze of college tuition. Other legislators have filed bills that would ban tuition increases beyond the rate of inflation, or even force schools to cut their costs by 15 percent.
But enrollment is still rising, and the state is entering another difficult budget season. The Senate’s first crack at the budget calls for hundreds of millions of dollars of cuts for universities. UT System Chancellor Bill McRaven told lawmakers last month that the Senate’s plan was potentially “devastating.” Presidents of smaller universities warned that they could lose half of their state funding if the bill passed as currently written.
Higher education fares better in the House’s preliminary budget, and senators have indicated that they expect to put more money in before their budget passes. But many leaders in the Capitol agree that higher education spending is going to be strictly scrutinized this year.
As lawmakers and university administrators grapple with the challenge, the Shannons will watch with a helpless feeling. No matter what the Legislature does this year, it’s going to be hard for them to pay the tuition bill.
“You do it,” Patti Shannon said. “I”m not going to tell my kids they can’t go to college. They are worth it. They are worth every dime. I just wish we didn’t have to spend it.”
See more of our related coverage:
- The quest by University of Texas System Regent Wallace Hall to win access to confidential student records is over. The Texas Supreme Court ruled that Hall had no standing to sue the chancellor of the system he oversees.
- In a day-long hearing, university presidents and chancellors said their schools might have to lay off faculty and cut classes if hundreds of millions of dollars worth of “special items” aren’t put back in the budget.
Disclosure: The University of Texas System, the University of Texas at Austin, Texas A&M University, Texas Tech University, the University of North Texas and Raymund Paredes have been financial supporters of The Texas Tribune. A complete list of Tribune donors and sponsors can be viewed here.
The Texas Tribune is a nonprofit, nonpartisan media organization that informs Texans — and engages with them — about public policy, politics, government and statewide issues.
Read the original article: https://www.texastribune.org/2017/02/07/texas-tuition-increasing-state-funding-falling/
